Medicare Act – Standing to Sue

Listen to this article

7^th Circuit Court of Appeals

Case Name: MAO-MSO Recovery II, LLC, et al., v. State Farm Mutual Automobile Insurance Company, an Illinois Company.

Case No.: 20-1268

Officials: SYKES, Chief Judge, and HAMILTON and SCUDDER, Circuit Judges.

Focus: Medicare Act – Standing to Sue

For the second time in as many years we affirm the district court’s dismissal of a lawsuit brought under the Medicare Act by entities seeking to collect on healthcare receivables assigned to them by so-called Medicare Advantage Organizations. The Medicare Act may authorize the lawsuit but, regardless, the district court rightly recognized that identifying a federal cause of action satisfies only half of the inquiry necessary to establish subject matter jurisdiction. The half left unsatisfied is Article III standing— the same shortcoming that resulted in the dismissal of the analogous lawsuit two years ago. Despite ample opportunity, the plaintiffs once again were unable to show any injury in fact. They failed to find within their basket of assigned receivables an example of a concrete and definite amount owed them by the defendant, State Farm Mutual Automobile Insurance Company. In affirming, we sound a word of caution. This lawsuit mirrors scores like it filed in federal courts throughout the country that have all the earmarks of abusive litigation and indeed have drawn intense criticism from many a federal judge. The plaintiffs should think hard before risking a third strike within our Circuit.

Affirmed

Full Text

Derek A Hawkins is Associate Corporate Counsel, IP at Amazon.